How do you cancel a credit card the right way?

To cancel a credit card: pay the balance to zero, redeem any remaining rewards, call the number on the back of the card to close the account, get written confirmation, and then cut the card. Understand that closing a card can temporarily lower your credit score by reducing available credit and shortening credit history.

Canceling a credit card is a four-step process: pay it off, redeem your rewards, call to close, and confirm in writing. The steps themselves take less than 30 minutes — but the decision to close warrants thought, because closing a card affects two components of your FICO Score: credit utilization and length of credit history.

Step-by-step: how to close a credit card

Pay the balance to zero. You cannot close an account with an outstanding balance. If you have a balance, pay it in full before proceeding — any remaining balance continues to accrue interest after the account closes.
Redeem all rewards. Points, miles, and cash back tied to a closed account are typically forfeited. Log into your account and redeem every available reward before calling to close.
Call the number on the back of the card. Ask to close the account. The representative may offer a retention offer (bonus points, rate reduction, fee waiver) — you can accept or decline. Confirm you are requesting account closure and note the representative's name and the date.
Request written confirmation. Ask for a letter or email confirming the account is closed with a zero balance. This protects you if any disputes arise later.
Monitor your credit report. After 30–60 days, verify the account appears as "closed by consumer" on your credit report — not "closed by issuer," which can look worse to future lenders.

Credit score impact of closing a credit card

Closing a card has two effects. First, it raises your credit utilization ratio — because you now have less total available credit against the same balances. myFICO notes that utilization accounts for about 30% of your FICO Score. Second, if the card is your oldest account, closing it may eventually shorten your average age of accounts. Closed accounts in good standing stay on your report for 10 years, so the history impact is delayed — but it's real.

When closing a card makes sense

Annual fee you're no longer getting value from — and the issuer won't waive it.
A card with a high APR you're tempted to carry a balance on.
Simplifying your finances when managing multiple cards is creating errors.
Closing a store card after the introductory offer is exhausted.

Don't close before applying for a mortgage or major loan

If you're planning to apply for a mortgage, car loan, or business financing in the next 6–12 months, closing a credit card — especially a high-limit one — can temporarily lower your score enough to affect your rate or approval. Consider waiting until after the loan closes.

What the regulators and FICO say

The CFPB states that closing a credit card account can increase your credit utilization ratio and potentially lower your credit score. — CFPB — How Closing a Credit Card Affects Your Credit
FICO notes that amounts owed — including credit utilization — makes up approximately 30% of a FICO Score and that closing accounts can increase utilization by reducing available credit. — myFICO — Amounts Owed
The FTC advises consumers to review their credit report after closing an account to verify it is reported as closed and reflects a zero balance. — FTC — Free Credit Reports

Key takeaways

Pay the balance to zero and redeem all rewards before calling to close.
Call the number on the card, request written confirmation, and note the rep's name.
Closing a card raises your credit utilization — which can temporarily lower your score.
Don't close a card in the months before applying for a major loan.
Verify the closed account shows correctly on your credit report within 30–60 days.

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